The new Labour government has committed to building 370,000 homes per year, but is it realistic?

The new Labour government has committed to building 370,000 homes per year, but is it realistic?

To look at it another way, that’s over seven thousand homes a week and more than a thousand homes a day.

By my rough calculation, by the time you read this then since Labour came to power they should have already built close to around 70,000 homes so far.

The 370,000-housebuilding target is certainly ambitious but it also comes with significant challenges and its realism is more than debateable.

The UK has historically struggled to meet such high targets. In recent years, the average number of new homes built annually has been around 240,000 to 250,000 and the last time the UK consistently built over 300,000 homes a year was in the 1960s.

Previous governments both blue and red have made similar pledges but have often fallen short, largely due to the complexities of the housing market and the various obstacles that arise.

PLANNING HURDLES

The UK’s planning system is often cited as a significant barrier to housing development. Delays in obtaining planning permission, local opposition (often referred to as ‘NIMBYism’ – ‘Not In My Back Yard’) and restrictive regulations can slow down or halt developments.

For Labour’s target to be realistic, substantial reforms to the planning system would be necessary. Streamlining processes and reducing red tape are crucial but politically challenging tasks.

“Even housing sites that are allocated in Local Plans can face opposition and delays, hindering much-needed development from moving forward,” explains Lawrence Turner, Director at planning consultancy Boyer.

“Implementing planning reforms that introduce mandatory housing targets, re-introduce regional planning and review the Green Belt can provide greater certainty in the planning process.

“This would give developers the confidence to invest in new development knowing that they are more likely to receive planning permission in a timely manner and without the additional cost of delays.”

LABOUR SHORTAGES

Other factors are at play too. The construction industry in the UK faces labour shortages, particularly post-Brexit, as well as supply chain issues that have driven up the cost of building materials which all impede the ability to ramp up construction to meet the target.

Elsewhere months of stubbornly high inflation and interest rates have also impacted the affordability of housing projects, both for developers and buyers, potentially slowing down demand and construction activity.

LOCAL AUTHORITIES

Boyer’s Turner reckons that one of the reasons no government has built more than 300,000 homes since the 1970’s is the decline in the ability of local authorities to build new homes.

“Throughout the 1950s, 60s and 70s nearly half of all new housing was delivered by local authorities. In comparison, while private housing delivery has declined, it has stayed relatively stable during the same period,” he says.

“By reinvesting in local authorities and providing them with the necessary resources and expertise, they can once again become key players in delivering affordable housing for their communities. This would reduce the burden on the private sector and ensure a more balanced approach to addressing the housing crisis.”

However, while Labour may propose increased public spending on housing, the private sector will still need to play a significant role.

LAND AVAILABILITY

The availability of land, particularly in areas of high demand like London and the Southeast, is also a critical issue. Greenbelt policies and urban density restrictions limit where homes can be built.

For Labour's target to be realistic, there would need to be significant efforts to release more land for development, potentially involving controversial decisions around greenbelt land.

Unfortunately, the success of Labour’s commitment will depend on sustained political will across multiple parliamentary terms, as housing development is a long-term process.

Public opinion can shift, particularly if new developments are perceived to negatively impact local communities or the environment.

Balancing these concerns with the need for more housing will be crucial.

“Delivering 370,000 homes per year is possible,” says Turner. But he adds: “It also requires a combination of planning reform, investment, technological innovation, and stable political leadership.

“By implementing this long-term plan, we can make significant progress in addressing the housing crisis and ensuring that affordable housing is accessible to all.”